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PostPosted: Tue Oct 16, 2018 9:28 am    Post subject: New Cold War - -with China? Reply with quote

The United States Is Entering A New Cold War — With China
It is better to be a conservative realist and nationalist than to be a utopian internationalist and be slapped in the face by reality.
Sumantra Maitra By Sumantra Maitra
OCTOBER 16, 2018

Whenever a rising power seeks to change an established order, it typically comes into a potential conflict with an established hegemon that intends to defend the geo-strategic status quo. It’s known in international relations as the “Thucydides Trap.” Harvard University professor Graham Allison has written extensively about this deadly pattern in global politics, which has arguably existed since the Peloponnesian war between Athens and Sparta.

Allison charted the past 500 years of history in his 2017 book, “Destined for War: Can America and China Escape Thucydides Trap?” He studied 16 such cases, 12 of which led to war. Of course, there were instances of no war — Spain and Portugal in the late 15th century, and Great Britain and the United States in the early 20th century.

But in those cases the two powers in question were tied not just by trade, but also by culture, and, most importantly, a common language and ethnic kinship. Allison predicts there’s a possibility that China and the United States are therefore heading for a conflict. He repeated the argument in a recent Financial Times essay.

Vice President Mike Pence recently laid out an aggressive new Trump administration policy on China, which could be heralded as a new cold war with China. In a long speech at the Hudson Institute, Pence said: “China’s aggression was on display this week, when a Chinese naval vessel came within 45 yards of the USS Decatur as it conducted freedom-of-navigation operations in the South China Sea, forcing our ship to quickly maneuver to avoid collision. Despite such reckless harassment, the United States Navy will continue to fly, sail and operate wherever international law allows and our national interests demand.”

The speech was one of the strongest by any American leader in the last decade, and included evidence that the Chinese state was manipulating and subverting the American system.

“America had hoped that economic liberalization would bring China into greater partnership with us and with the world,” he said. “Instead, China has chosen economic aggression, which has, in turn, emboldened its growing military.”

That was not all. Republican Sen. Marco Rubio has taken up the cause of human rights in China, reflecting an increasingly bipartisan consensus among American policymakers that China isn’t liberalizing anytime soon, but is actually turning the clock back. The Wall Street Journal this week reported the American strategic community has lost its patience with repeated Chinese spying, harassment, and hacking.

“At the Pentagon, military brass have historically sought a relationship with their Chinese counterparts that would survive political mood swings,” the WSJ reported. “Even there, senior officials say they have reached their limit.”

The report added that Gen. John Kelly and Gen. Joseph Dunford came back from trips to China disillusioned and hardened about the reality the United States faces. In one instance, Kelly was in an actual physical struggle, when one overenthusiastic Chinese security attaché tried to grab the American president’s nuclear football.

Is China a Threat?

So, how big a threat is China? And if this is a cold war, how is it similar, or different, from the last one? Who are the prime geopolitical actors this time, and what is the American endgame? What are we getting into?

As Reihan Salam wrote in The Atlantic, “To cosmopolitan liberals, it is Russia that serves as America’s chief geopolitical adversary. … Nationalist conservatives see rising Chinese power as the far graver threat to American interests.”

For foreign policy liberals, human rights matter more than hard power. Russia, as a conservative society with a masculine culture and virulently anti-LGBT and anti-feminist politics, is the natural antithesis to a values- and rights-oriented liberal world order. Conservatives, and especially foreign policy realists, on the other hand, are more hard-nosed about power politics. To them, China — with its second-largest economy, second-largest defense budget, the largest growing military bases, an ever-assertive blue water Navy, and salami-slicing tactics in Asia — remains the far bigger threat.

That is also close to the assessment of the American strategic community. Russia, for all its “sphere of influence” politics and delusions of grandeur, is a declining power, with a mono-industrial and static economy, demographics in perpetual decline, and stagnated innovation. It has power and a will to commit mischief, even to get into short proxy wars in the neighborhood, but there are no threats of Russian tanks running through Belgian or Polish meadows.

Also, Russia never faced any real concerted backlash. Russia wouldn’t be able to cope if Europe stops importing Russian gas, hardens resolve, bogs down Russia in Ukraine and Syria, and counter-attacks in the cyber domain. Europe won’t do it, but that’s a different matter.

A Different Beast to Tame

Consider the evidence. The American rebalancing towards Asia started with the much-vaunted pivot under President Obama, but even he got buried in the toxic, cancerous, and medieval Middle Eastern wars, despite his instinctive aversion towards foreign intervention. With Trump, there was a careful two-pronged approach towards Asia. There was an effort to cool off the permanent Korean threat and encourage a détente between the North and the South, and an effort to grow a personal relationship with China’s President Xi, while hardening the U.S. position with regard to naval patrols and trade.

China, meanwhile, has been continuously interfering in the American political system, from data hacking and cyber warfare, to spying on senile Democratic senators, to infiltrating academia. The trade negotiations between the two powers stopped after Trump decided to impose further tariffs amounting to $200 billion. However, trade was just a start.

Followed by the Sino-Russian joint military exercise, the United States sanctioned the Chinese military agency for buying Russian weapons (including jets and anti-air missile systems), which China protested as an interference in sovereign matters. In response, China also recalled an admiral and cancelled a planned military talk. Beijing demonstrated its wrath by nearly ramming a Chinese warship into a U.S. Navy destroyer and cancelling future exercises with the Chinese military.

The U.S. reaction to China was inevitable. A security dilemma and spiral, after all, is the only pattern of geopolitics. But the question remains: what new Cold War are we getting into? This is not an ideological battle like the one our fathers knew. China isn’t fomenting revolution across the globe. In fact, China wants more economic stability around the world, simply because they want to sell their goods and capture markets.

China is interested in a soft imperium — buying out lands and properties in Africa and Asia and slowly nudging Washington out as the net security provider of the region. This is a classic geo-strategic rivalry, sort of like the British Empire and Imperial Germany, although with a minimal risk of an actual war because of nuclear deterrence. China also lacks an alliance network in Asia.

But that doesn’t mean there won’t be any conflict or proxy wars. American policymakers need to keep other factors in mind. It is a multipolar world, unlike the bipolar stability of Soviet American rivalry. Russia and China are not natural allies, but regardless of how powerful America is, it cannot afford to have a simultaneous geopolitical rivalry with both the great powers. It cannot also afford to be bogged down spreading democracy in the Middle East, which is not going to stabilize in the foreseeable future.

The power of U.S. sanctions is also weakening, as countries are tired of the overuse of this economic weapon, and because its global relative power has changed since the 1990s. The EU, for example, is planning an alternative reserve currency, which will heavily weaken U.S. economic power if given a go-ahead.

While a divided Europe will lean toward the United States, due to the American security umbrella, a unified Europe might just side with China if its trade is threatened. Are American policymakers ready, united, capable, and willing to coerce Europe? How unified are the American public behind this new cold war? What about large tech companies, which are more than happy to bend over backwards to appease China but refuse to side with the Pentagon?

In American society, the forces of civic nationalism are making a comeback. That is good, regardless of what liberal internationalists think, because the world itself is changing. It is better to be a conservative realist and nationalist than to be a utopian internationalist and be slapped in the face by reality.

The new National Security Strategy is a good start. It highlights the return of a great power rivalry, but it is for the wonks. Convincing common people of the incoming long era of strategic rivalry and the necessity of it remains a Churchillian task.
Sumantra Maitra is a doctoral researcher at the University of Nottingham, UK. His research is in great power-politics and neorealism. He also regularly writes for The National Interest and Quillette Magazine, and edits Bombs and Dollars blog. You can find him on Twitter @MrMaitra.

This is a hugely significant possibility. It will make most things we buy more expensive. It will enable local industry to some degree. It could also become a hot war. If you look at a map, you can see that China wants to control the waters around the Philippines and Singapore. They are building a railroad to Europe, and if they can prevent maritime commerce, it will prosper. It's more complex than that, but that gives you a starting point.

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PostPosted: Fri Nov 02, 2018 12:03 pm    Post subject: Reply with quote

More New Cold War stuff. The Russians had a huge war game in its interior a few months ago. Now NATO is flexing some muscle.

Whether a pantomime for diplomatic use, or an actual preparation for war with Russia, I don't like it.

NATO kicks off biggest war games since Cold War

COPENHAGEN, Denmark -- NATO's biggest military maneuvers since the Cold War kicked off Thursday in Norway in a hypothetical scenario that involves restoring the Scandinavian country's sovereignty after an attack by a "fictitious aggressor."

Russia, which shares a border with Norway, was briefed by NATO on the Trident Juncture 2018 drill and invited to monitor it, but Moscow is still angered by the exercise. Russia's defense minister had warned that Moscow could be forced to respond to increased NATO activity close to its western border.

"NATO's military activities near our borders have reached the highest level since the Cold War times," Russian Defense Minister Sergei Shoigu said Wednesday, noting that the war games will be "simulating offensive military action."

The war games bring together around 50,000 personnel from all 29 NATO allies, plus partners Finland and Sweden. Around 65 vessels, 150 aircraft and 10,000 vehicles will participate.

The drill scheduled to end Nov. 7 takes place in central and eastern Norway, the North Atlantic and the Baltic Sea.

Its aim is to ensure that NATO forces are trained, able to operate together, and ready to respond to any threat from any direction, according to the 29-member alliance.

In a joint op-ed published Thursday in Dagens Nyheter, one of Sweden's largest newspapers, the Nordic defense and foreign ministers said they saw "no military threats against the Nordic countries today, but we live in an unpredictable and uncertain time."

NATO chief backs Trump, says Russia violating nuke treaty
"Russia has both shown the will and ability to use military force to achieve strategic goals," Sweden's Peter Hultqvist wrote together with Frank Bakke-Jensen of Norway, Denmark's Claus Hjort Frederiksen, Jussi Niinisto of Finland and Iceland's foreign minister, Gudlaugur Thor Thordarson.

"Cyber-attacks and disinformation are actively used to create divisions between people in Europe as well as in the United States, which in turn challenges democratic institutions and our ability to reach common conclusions," they said.

Tensions in the region have grown between Baltic NATO members and Moscow, including reports of airspace violations by Russian military aircraft. Non-aligned Sweden and Finland have watched with increasing trepidation, stepping up their own military activity with cross-border exercises and drills with NATO countries.

© 2018 The Associated Press. All Rights Reserved.

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PostPosted: Sat Dec 01, 2018 7:33 pm    Post subject: Reply with quote

"Too Soon For A Deal": All You Need To Know About "The Most Important Trump-Xi Meeting In Years"

by Tyler Durden
Sat, 12/01/2018 - 17:16

With the United States and China locked in growing disputes over trade and security that have raised questions about the future of their relationship, presidents Trump and Xi are due to sit down for dinner at the end of a two-day gathering of G-20 world leaders in Buenos Aires. The highly anticipated meeting between the two superpower leaders, which is expected to be the defining market moving event for the last month of the year, will wrap up a global summit on Saturday with high-stakes talks expected to determine whether they can begin defusing a damaging trade war between the world’s two biggest economies.

On Friday, the market bounced hard into the close after the first day of the G20 summit offered glimmers of hope for progress between Washington and Beijing despite Trump’s earlier threat of new tariffs, which would increase tensions already weighing on global financial markets. But on the eve of what Reuters dubs "the most important meeting of U.S. and Chinese leaders in years", both sides said differences remained, and the outcome of the talks were uncertain.

There are two parallel pathways that traders will keep a close eye on today in Buenos Aires:

The first, and less important one, has to do with whether the G20 summit will conclude with a consensus statement as delegates from G20 nations worked late into the night to seek agreement on the summit’s final communique, which in past years has been worked out well in advance.

According to Reuters, European officials said on Saturday that a draft of the document committed to reforming the World Trade Organization (WTO), which has been engulfed in institutional crisis just when it is most needed to perform its role as umpire in trade disputes. They said the draft also included a reference to climate change - a sensitive issue for Trump, who is a skeptic that global warming is caused by human activity.

The communique needs to be endorsed by the leaders of member states.

The second, and far more critical one, is the outcome of the dinner talks between Trump and Xi, which according to Goldman "represents an important milestone in the continuing US-China trade tensions" and "an opportunity to de-escalate the trade dispute between the two countries."

In previewing the odds of a favorable outcome, Trump was typically coy on Friday even as he noted some positive signs.

“We’re working very hard. If we could make a deal that would be good. I think they want to. I think we’d like to. We’ll see,” he said, speaking during a meeting with Japanese Prime Minister Shinzo Abe.

The market then rallied hard into the close when a Chinese foreign ministry official in Buenos Aires said there were signs of increasing consensus ahead of the discussions but that differences persisted. Beijing hopes to persuade Trump to abandon plans to hike tariffs on $200 billion of Chinese goods to 25% in January, from 10% at present. To date, roughly $250 billion in goods from China and $110 billion in goods from the US have been subject to additional tariffs, and further tariffs have been threatened. Trump has threatened to go ahead with that and possibly add tariffs on $267 billion of imports if there is no progress in the talks.

As shown in the chart below, for much of 2018 the Trump Administration’s proposal of new tariffs far outpaced actual implementation. By July, the Administration had proposed tariffs on solar panels and washing machines ($10bn), global steel and aluminum imports ($50bn), global automobile imports ($340bn), and all imports of goods from China ($500bn). From June through August, the amount of imports subject to tariffs ratcheted up very gradually, and it was not until September 24 – when the US imposed tariffs on $200bn in imports from China – that the amount rose more substantially.

The effect of these tariffs has been evident in customs receipts, which have risen substantially over the last few months, something which Trump has repeatedly touted as a fringe benefit of the escalating trade war.

So what, according to Goldman, are the odds of a (credible) deal being announced today? Surprisingly, Goldman is rather pessimistic saying that it is "Too soon for a deal."

Goldman outlines three most likely outcomes:

A deal (10% chance). Talks have been taking place for a few weeks at lower levels, and it is possible that Presidents Trump and Xi could agree on a set of specific concessions on both sides. For example, President Trump could agree to lift tariffs on certain Chinese exports and to halt further tariffs in return for a commitment from President Xi to ensure greater purchases of US exports and liberalize various policies. This sort of deal could ultimately be struck, but we are skeptical that it will be struck now.
A truce (just under 40% chance). Since dialogue only restarted recently, a more likely outcome than an outright “deal” would be a truce where the US refrains from imposing additional tariffs for the time being (i.e., postponement of the 25% step-up in tariff rate and no new tariffs on additional goods) and China commits to quickly propose a set of reforms, perhaps along with a down payment on a deal such as a commitment to increase purchases of certain US commodity exports. This does not strike us as the most likely scenario, but it certainly appears to be a possibility.
Further escalation (just over 50% chance). We think it is slightly more likely that the talks end with an optimistic tone but that there is no immediate commitment to delay the step-up in the tariff rate to 25%. That said, we view this as a reasonably close call.
Goldman acknowledges that it is "somewhat less optimistic than the consensus view regarding the prospects for a near-term “deal” or truce" for three general reasons.

First, for as much as financial markets and affected industries might cheer a truce in the trade dispute, there is fairly broad political support—among the public and among members of Congress—for taking a tough stance on US-China trade issues. We note, for example, comments from Senate Minority Leader Schumer and Senate Finance Committee Ranking Member Wyden urging the President not to “back down” and accept a “weak and meaningless agreement” at the G20 meeting.
Second, reaching an agreement could be technically challenging. We do not believe there has been sufficient groundwork ahead of the meeting to allow for any sort of specific agreement at the G20. This would make reaching a “deal” scenario as outlined above difficult. Without a specific and enforceable agreement in hand, it is also unclear whether the White House would be willing to reverse the planned step-up in the tariff rate to 25%.
Third, this might not be a politically opportune time for an agreement. While some observers argue that President Trump might ultimately agree to a deal with China that results in only modest policy changes (as was the case with the US-Mexico-Canada Agreement) or involves a promise to hold off on additional tariffs in return for a commitment to negotiate (as was the case earlier this year with the EU on auto tariffs) we note that both of these examples occurred shortly before the midterm election, when announcing “wins” on trade policy carried larger political advantages. The political benefits of any agreement with China struck now would presumably have faded long before the US presidential election in nearly two years.
Other banks are somewhat more optimistic, expecting a "truce" base case with a roughly 70% odds, in which as Goldman explained, existing tariffs stay in place, but additional tariffs are taken off the table during the negotiating period. If such a ceasefire lasts at least 3 months, it will be enough to send the S&P to 2,800, or considering the Friday close of 2,760, it is now largely priced in. [....]

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PostPosted: Tue Dec 04, 2018 1:30 pm    Post subject: Reply with quote

Excellent video analysing the trade negotiating position of China in the trade talks ...


It is apparent that China is showing who has the upper hand ... they have increased their purchases of agricultural products from the USA, for example, in order to get the US to agree to delay an increase in tariffs for three months.

Trump has been saying he likes it the way it is now because there is so much new revenue for the government.

A victory here would put Trump is a strong position.
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New Cold War - -with China?

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